Speech by H.E. Ambassador Liu Xiaoming at the Keele World Affairs Meeting: Reform Advances Development in China and Opening up Promotes Progress in the World

Keele University, 6 December 2018

2018/12/07

Chairman Bill Boynton,

Vice-Chancellor Trevor Mcmillan,

Ladies and Gentlemen:

Good evening!

Let me begin by extending my thanks to Keele World Affairs for your kind invitation and to Keele University for your warm hospitality.

Chairman Boynton told me that I am the first Chinese Ambassador to speak at Keele World Affairs meetings. I regard it as a great honour.

I am asked by Chairman Boynton to talk about China’s reform and opening up, and its influence on the world. I think this is a timely topic as this year marks the 40th anniversary of China’s reform and opening up.

Forty years since China embarked on this great and historic journey, we have liberated our minds and carried out courageous reform; we have reached out to the world and become an integral part of the globalization process. With diligence and wisdom, the Chinese people have created a miracle in the history of human development.

Just as President Xi Jinping said, “Reform and opening up, which is China’s second revolution, has not only profoundly changed the country but also greatly influenced the whole world.”

Confucius said, “At forty, one has no doubts.” After forty years of reform and opening up, China has no doubts about its choice forty years ago.

Today, in the context of reform and opening up, I would like to share with you my views on three questions. I hope what I am going to say will provide you with a better understanding of China’s development and its influence on the world.

The first question is: How is China changed by reform and opening up? In my opinion, the changes are enormous, profound and historic.

First, China’s economy has grown by epoch-making leaps and bounds.

Forty years ago, China was the tenth largest economy, with a GDP of $175 billion and accounting for 2% of the world’s total.

Over the past forty years, China has maintained an average annual growth rate of 9.5%. This is the world’s highest GDP growth rate for the longest time since the Second World War.

Today, China’s GDP stands at $12 trillion, increasing 33.5 times in real terms and accounting for 15% of the world’s total. It is the world’s second largest economy with the biggest foreign exchange reserves. It is also the biggest industrial country, largest trader in goods and top producer of more than 220 products.

Today, China is shifting from high-speed growth to high-quality growth. We have achieved major breakthroughs in manned space programme, lunar exploration, supercomputer, satellite navigation, quantum communications and other hi-tech fields. In areas such as high-speed rail, mobile telecommunications and nuclear energy, China is also a leader in the world.

Take high-speed rail for example. China has built the world’s fastest railway network. Every day at eight o’clock in the morning, there are more than 1,700 express trains running across China. On average, one express train passes through Shanghai Railway Station, the busiest in China, every 84 seconds.

While on home leave in China last month, I took an express train from Beijing to Nanjing more than 1,000 kilometres away. It took me only four hours. Last week, I traveled from London to Gleneagle of Scotland less than 600 kilometres away, and spent six hours on the train. My British friends asked me, when will the UK have a high-speed rail network like China’s? I said, I hope it won’t be long.

Another good example is the booming new industries and business models. With more than 500 million people using mobile payment, the digital economy is thriving in China. China is leading the new era of global payment system. On November 11th, China’s equivalent of “Black Friday”, online shopping topped 200 billion RMB yuan in a single day. This is one third of the annual trade between China and the UK.

Second, reform and opening up have changed the life of the Chinese people beyond recognition.

The past 40 years have seen shortage replaced by affluence and poverty replaced by moderate prosperity.

In poverty reduction, China has hit the targets set by the Millennium Development Goals and the 2030 Agenda for Sustainable Development of the UN ahead of schedule. China’s population in absolute poverty has dropped from 770 million to a little over 30 million. This means 740 million people have been lifted out of poverty. That accounts for more than 70% of the concurrent world total.

In social security, China has built the world’s largest network, with a basic pension insurance system covering more than 900 million people and a basic health insurance system covering 1.3 billion. On top of that, we have put in place a nine-year free and compulsory education system.

In household income, the increase has been faster than GDP growth for many years. Today, China has the world’s largest middle-income population, that is, more than 400 million. This is larger than the entire population of the United States.

Consumer needs and spending power have kept growing.

In the 1970s, the main “dream items” of Chinese households were watches, sewing machines, bicycles, radios and cameras. The average costs were a few hundred yuan.

In the 1980s, the “dream items” changed to TV set, washing machine, tape recorder and refrigerator. The average costs rose to a few thousand.

In the 1990s, computer, phone and air conditioner became the new “dream items”, each costing more than ten thousand yuan.

Today, the “dream items” for the 21st century Chinese households are house, car and holiday. The average spending ranges from hundreds of thousand to several million yuan.

Third, reform and opening up have transformed China’s relations with the world.

For 40 years, China has stayed committed to opening up the country to the outside world. The once closed and semi-closed country became one that opens up on all fronts.

From embracing foreign businesses at home to exploring access to the world, from becoming a WTO member to proposing the Belt and Road Initiative, China has played the role of world economic stabiliser and powerhouse. China’s contribution to global growth has been more than 30% for many years in a run.

China has also contributed to world peace and development by proposing to build a community with a shared future for mankind and a new type of international relations. The former has been endorsed in documents of the UN and the G20.

Today, more and more Chinese are trading, investing, studying or holidaying abroad. As of 2017, there were more than 30,000 Chinese companies, about one million Chinese contract workers and 1.37 million Chinese students all over the world. Chinese tourists made more than 130 million overseas trips in 2017, which was 7% more than the previous year.

Last month, the first China International Import Expo was successfully held in Shanghai. This was the first-ever national-level Expo dedicated solely to import. Delegations from 172 countries, regional economies and international organizations gathered in Shanghai, more than 3,600 companies took part in the Expo and $57.83 billion worth of deals of intended purchases were signed.

The UK was a country of honour at the Expo, where more than 50 British companies led by The Duke of York and Secretary of State for International Trade Liam Fox signed about £2 billion of deals with Chinese companies.

However, despite the tremendous progress, China remains the world’s largest developing country. Our population is large. Our economic foundation remains weak. In terms of per capita GDP, we are a long way behind many other countries in the world. On the whole, we still face the bottlenecks of insufficient, imbalanced and unsustainable development. Let me give you some numbers.

China ranks the 71st in the world in per capita GDP and the 91st in human development index.

There are still 30 million Chinese living in poverty,

more than 80 million people with disabilities,

over 200 million pensioners in need of care

and about 15 million new workforce in need of a job every year.

I once served as Assistant Governor of Gansu, one of the least developed provinces in China. I know from personal experience the severe challenges China has to face and the daunting tasks China has to shoulder. As a big country with more than 1.3 billion people, China is bound to encounter numerous difficulties and challenges on its way ahead. But under the leadership of the Communist Party of China and with the diligence and wisdom of 1.3 billion Chinese people, we have the confidence and capability to overcome difficulties and create a beautiful future.

The second question I wish to discuss with you is: Why is China able to achieve these changes? I think there are three reasons.

First, China has been following a path of its own choice.

How do you judge whether a country has taken the right path, or the one that suits? I think you have to prove with concrete facts whether this path is leading to better development and higher standard of living. China’s achievements are strong proof that China has chosen a development path that suits its national conditions.

Historically, China experimented with many foreign governance systems. But these could not settle in or take root. After trial and error, the Communist Party of China led the nation onto the path of socialism with Chinese characteristics. Years of hard efforts along this path have enabled China to gain independence, grow prosperous and become strong.

Socialism with Chinese characteristics in the new era is the choice of the Chinese people. It is gradually defined in the process of reform and opening-up. It is the most suitable path for China.

It has led China to a profound transformation.

It is an effective way to development and modernization.

It represents China’s wisdom and solution in addressing the problems of human society.

And it shows that there could be many roads leading to prosperity. Countries only have to find the right direction and stick to it.

The second reason is that China has embraced the world with open arms.

“The ocean is vast because it admits all rivers.” The world is composed of more than 200 countries and regions. They are different in culture, race, religious belief and social system. Globalisation is a way of life that no one can escape from. No country can achieve development behind closed doors.

But openness requires one to be inclusive. Being inclusive is about respecting other countries’ rights to choose their own social systems and development paths independently. It is about turning diversity into dynamism.

Being inclusive is also about encouraging mutual learning between different civilisations, so that the different strengths of diverse cultures could be channeled into promoting social development and safeguarding world peace.

The world is undergoing a new round of profound development, transformation and adjustment. Increasing multi-polarity, economic globalisation and IT application have drawn countries of the world closer. Despite their differences in social system, culture and development stage, countries are more inter-dependent and their interests are more deeply integrated to an extent and depth unprecedented in human history. This has turned the world into a community with shared interests, shared responsibilities and a shared future.

In the dynamics of this community,

Cold-war and zero-sum-game mentality is outdated;

"Putting one’s own country first” and “minding one’s own business” do not work;

Being open and inclusive, and pursuing peace and cooperation are the only right choice.

The third reason is that China has engaged in win-win cooperation with other countries.

Win-win cooperation is at the centre of the Chinese culture. In 40 years’ of reform and opening up, it is through win-win cooperation that China reached out to the world and deepened its integration with the world.

Countries have their own interests to take care of and goals to pursue. But these should not be done at the expense of the interests of other countries. In a world of inter-connected development, countries are all in the same boat and need to come to each other’s assistance, enhance policy coordination and strive for win-win results.

The Belt and Road Initiative is aimed at enhancing connectivity.

It has been five years since President Xi Jinping proposed the Belt and Road Initiative (BRI). This Chinese Initiative has delivered benefits to the whole world over the past five years. It follows the principles of extensive consultation, joint contribution and shared benefits, and serves as a platform for win-win cooperation between all countries in the world.

In the past five years, the BRI has been translated from an idea to actions, from a vision to reality. To borrow a terminology of traditional Chinese painting, the sketch of BRI is now completed with “freehand brushwork” and it is time to attend to the details with “fine brushwork”.

By last September, China had signed cooperation agreements with more than 140 countries and international organisations.

More than 10,000 China Railway Express trains have travelled between China and 43 cities in 15 European countries. Early last year, a China Railway Express train made its first round trip between China’s Yiwu and London.

Trade in goods between China and countries along the routes has exceeded $5 trillion. China has signed or upgraded five trade agreements with 13 countries and is now the largest trading partners of 25 countries along the routes.

China has also invested more than $86 billion and helped establish 82 economic and trade cooperation zones in countries along the routes. These zones now host 6,000 projects which have created more than 240,000 jobs and contributed billions of dollars in tax to the local community.

Next year, China will host the second Belt and Road Forum for International Cooperation. It is open to British friends from all walks of life.

Now let me come to my third and last question: What do the changes in China mean to the world? I believe that China will play an important role in the world in the following three aspects:

First, China is a contributor to world economy.

Over the years, China has been a key engine driving world economic growth.

In 1997, when the financial crisis hit Asia, China’s currency came under enormous downward pressure. But China stood firm, kept the RMB stable and help its neighbors tide over the difficulties.

In 2008, when the financial crisis engulfed the world, China maintained robust growth. It served as a ballast stone for the world economy, and made indispensable contribution to the economic recovery afterwards.

In the coming 15 years, China plans to import more than $30 trillion of goods and more than $10 trillion of services.

As the world’s largest developing country, China is a sincere friend and close partner of other developing countries. Through experience sharing, aid and personnel training, China has supported other developing countries in their fight against poverty.

As of today, China has provided nearly 400 billion RMB yuan in development aid to more than 160 countries and international organisations. In doing so, China did not attach any political strings and always attends to the needs of recipient countries and aims to improve their capability of independent and sustainable development. This is why Chinese assistance is always warmly received by the developing countries.

Last September, the Forum on China-Africa Cooperation held a successful Summit in Beijing. Fifty-four countries and the AU Commission participated in the Summit, representing 2.6 billion African people. The Summit saw the signing of important outcomes and the consolidation of African aspiration and consensus for unity and cooperation. It rolled out eight major initiatives on industrial promotion, infrastructure connectivity, trade facilitation, green development, capacity building, health care, people-to-people exchange, and peace and security. China also pledged $60 billion in support of African development and canceled the debts of some African countries.

Second, China is a defender of world peace.

As a permanent member of the UN Security Council, China shoulders and has fulfilled the special responsibilities of safeguarding world peace. Wherever war rages, Chinese peacekeepers stand in harm’s way.

China is the second largest contributor to the UN peacekeeping budget and the largest contributor of peacekeeping personnel among the P5.

China has sent a total of 37,000 Chinese military and police officers to various UN missions and 21 brave Chinese soldiers gave their life for the lofty cause of peacekeeping.

China has set up an 8,000-strong peacekeeping standby force and a standby peacekeeping police force.

In the Gulf of Aden and off the Coast of Somalia, China has carried out escort missions for ten consecutive years, ensuring the safe passage of more than 6,000 ships, including those from the UK.

In Africa, China has deployed the first helicopter unit and provided a number of personnel training courses for the UN and relevant countries.

China has been a partner in the international response to almost all regional and hotspot issues. From the Korean Peninsula to Iran, from Myanmar, Afghanistan to Syria and South Sudan, and in the fight against terrorism, China has contributed its wisdom, propose its solutions and played a constructive role.

On the Korean Peninsula nuclear issue, in particular, China has played an indispensable role. We stay committed to denuclearisation of the Peninsula, to peace and stability on the Peninsula, and to addressing problems through dialogues. China has also facilitated contacts between the US and the DPRK and the ease of tensions between the North and the South.

Third, China will be an upholder of world order.

The world is standing at an important crossroads. The international rules are under attack, the multilateral system is facing challenges, and the international landscape is strewn with instabilities and uncertainties.

Shall we uphold multilateralism and free trade, or allow unilateralism and protectionism to spread? This is a critical question that bears on the development of all countries and the future of mankind.

China always believes that in state-to-state relations, it is natural that countries have different opinions. It is crucial that we manage, control and address these differences on the basis of mutual respect, in accordance with the universally-accepted international rules, and in a practical and constructive manner.

Therefore, we should uphold the multilateral system with the UN as its core and oppose cherry-picking rules according to one’s own will.

China has been active in integrating with the existing international system. China has taken part in almost all the important inter-governmental organisations in the world and signed more than 300 international conventions. It is playing an increasingly important role in the global governance system.

The negotiations on China’s accession to the WTO lasted 15 years. Despite all the cost, China has fulfilled all pledges and remained firm in being a part of the world economic system.

China stands ready to work with the UK and other countries to advance the reform in the WTO on the basis of upholding the core values of the multilateral trade regime, protecting the interests of developing members and following the principle of consultation and consensus.

I know many of you have been following closely the trade frictions between China and the US. Several days ago, President Xi Jinping and President Trump had a successful meeting during the G20 Summit. They reached consensus on not imposing new additional tariffs. They also agreed to instruct the economic teams of the two sides to step up negotiations toward the removal of all additional tariffs and a concrete agreement leading to win-win results.

This is a positive development. China and the US are both major countries. Cooperation will benefit both countries while confrontation serves the interests of neither side.

Some people seem to believe that the history of the rise and fall of big countries will repeat itself and that a country with increasing strength will surely seek hegemony. Along this logic, they conclude that China will seek hegemony in the future and even challenge or replace the leading role of the US in the world. This is a major strategic misunderstanding and misjudgment concerning China.

I wish to reiterate that China is committed to the path of peaceful development. This development path is different from previous emerging powers. China will not take the role of other country, or challenge or still less replace any country.

In state-to-state relations, unilateralism and protectionism will backfire. Anyone going down this path is “lifting a stone only to drop it on one’s own feet”.

Differences do exist between countries. The proper way to address them is equal-footed dialogue and consultation according to rules and based on consensus. This is China’s position. By taking this position, China not only safeguards its own legitimate rights and interests but also upholds the free trade system, defends the international rules and order, protects the prospects of world economic recovery and advance the common interests of all countries in the world.

Ladies and Gentlemen,

Dear Friends,

We have a saying in an ancient Chinese classic which goes like this:

“All living creatures grow together without harming each other; all roads run parallel without interfering with one another.”

This represents China’s view of the world.

If we compare China to a book, this is not one about invading or enslaving other countries, or strength leading to hegemony. This is a book about China’s logic, which says “be you better self and influence those around you”;

This is a book about China’s wisdom, which champions inclusiveness and openness;

This is a book about China’s solution, which advocates equal-footed consultation and peace talks.

I hope my speech will serve as a preface to this book.

I hope you will open this book, read it and gain a better understanding of China.

And I hope the people of our two countries will join hands with people all over the world to build a community with a shared future for mankind!